Fortunately Unique Situation

[Haley Edwards]

My grandmother left me her house in a great location in town in a good neighborhood close to good schools and 2 large hospitals. 3 bed, 2 bath with a large living room and separate den (I use as an office). Only like 8k left on a HELOC she had. I want to keep this house forever and I want to put about 10k worth of work in it and make it a rental. My boyfriend and I have several large dogs, a few horses and cows that live at friend's houses so we need more space out of town. We've found a perfect fixer upper but I want to use the best strategy. He wants to pull enough out of his 401K for down payment and closing but that will be all we have and will need some to put up fence and fix up the house a bit. I was thinking I could either try to get a HELOC or equity loan for repairs both on the new house and the old house/new rental.

I believe I would have access to about 140k in equity. It should rent for $1300/month. The payment on the HELOC now is $70/month.

Tell me what you think of this situation and what you would do. 

Also- I have been working on my credit for a year and it is better but not great. I won't be getting any wonderful rates for anything